WCIRB Approves Dual Wage Threshold Increases for 2026: What California Contractors Need to Know
Author, Jeremy Hoolihan, Partner, Rancho Mesa Insurance Services, Inc.
The Workers’ Compensation Insurance Rating Bureau (WCIRB) has reviewed and approved a proposal to increase the hourly wage threshold for 13 out of the 16 dual wage classifications by $2 to $5 per hour that would go into effect September 1, 2026, once Insurance Commissioner Ricardo Lara agrees.
This upcoming change could have a direct impact on your workers’ compensation premium, if you employ workers in any trade subject to the dual wage classifications.
There are 16 dual wage classifications that will affect California Contractors:
| Dual Wage Classifications | Curent Threshold Effective 2024 |
Recommended Threshold Change |
Recommended Threshold |
| 5027/5028 Masonry | $35 | +$2 | $37 |
| 5190/5140 Electrical | $36 | +$4 | $40 |
| 5183/5187 Plumbing/HVAC | $32 | +$3 | $35 |
| 5185/5186 Automatic Sprinkler Install | $33 | +$3 | $36 |
| 5201/5205 Concrete or Cement Work | $33 | +$3 | $36 |
| 5403/5432 Carpentry | $41 | +$5 | $46 |
| 5446/5447 Wallboard Install | $41 | +$4 | $45 |
| 5467/5470 Glaziers | $39 | +$4 | $43 |
| 5474/5482 Painting/Waterproofing | $32 | +$4 | $36 |
| 5484/5485 Plastering or Stucco Work | $38 | +$4 | $42 |
| 5538/5542 Sheet Metal | $33 | +$4 | $37 |
| 5552/5553 Roofing | $31 | +$2 | $33 |
| 5632/5633 Steel Framing | $41 | +$5 | $46 |
| 6218/6220 Excavation/Grading | $40 | TBD | TBD |
| 6307/6308 Sewer Construction | $40 | TBD | TBD |
| 6315/6316 Water/Gas Mains | $40 | TBD | TBD |
Data from the WCIRB’s Classification and Rating Committee Meeting on November 11, 2025.
https://www.wcirb.com/sites/default/files/2025-11/20251111_cr_presentation.pdf
In California, certain construction class codes use a dual wage system to separate employees into two tiers:
Higher Wage – Workers earning at or above a set hourly threshold qualify for lower workers’ compensation rates because statistically these workers have lower claim frequency and severity.
Lower Wage – Workers earning below the threshold qualify for in the higher workers’ compensation rates because they tend to be less experienced and have a higher frequency and severity of claims.
The WCIRB periodically adjusts these thresholds to reflect rising wages, inflation, and updated claims data. When wages increase across the industry but thresholds stay static, more employees drift into the higher wage threshold which creates an imbalance. Therefore, the WCIRB now reviews and adjusts the thresholds every two years.
In preparation for proposed wage threshold changes, business owners may want to consider implementing the following strategies:
Review your payroll and identify employees earning near the current dual wage threshold.
Model the impact and estimate how a $2 to $5 per hour increase could affect your premium classification mix.
Evaluate wage adjustments by comparing the cost of modest raises against the savings from qualifying for lower workers’ compensation rates.
Keep accurate records! Maintain clean timecards and payroll documentation for upcoming audits.
Talk with your broker now to help you analyze potential exposure and prepare for your 2026 renewal.
The WCIRB’s Classification and Rating Committee reviewed these proposed increases in a meeting on November 11, 2025 and has approved them as part of the Bureau’s regulatory filing next spring for Lara’s consideration. If accepted, the updated thresholds would apply to policies incepting on or after September 1, 2026.
For any questions relating to how the dual wage threshold increase will affect your workers’ compensation premiums, reach out to me at (619) 937-0174 or jhoolihan@ranchomesa.com.